Thursday, 12 December 2019

Questions (2)

Aengus Ó Snodaigh

Question:

2. Deputy Aengus Ó Snodaigh asked the Minister for Culture, Heritage and the Gaeltacht if her attention has been drawn to the fact that the Arts Council is set to move offices to a less appropriate building; if her attention has been further drawn to the fact the proposed new building has substantially higher rent and an atypical buy option; if her attention has been further drawn to the fact that if the deal is completed, it will involve the breaking of its existing lease (details supplied); and if she will make a statement on the matter. [52179/19]

View answer

Oral answers (6 contributions) (Question to Culture)

Is the Minister aware of the Arts Council's plan to move its head office to a less appropriate building? If so, does she believe this move is appropriate in light of a protected disclosure that I have sent on to her and to the Chairman of the Joint Committee on Culture, Heritage and the Gaeltacht, as instructed by the person who made the protected disclosure to me?

I assure the Deputy the Department has been kept fully informed of this issue at all stages. Under the Arts Act 2003, the Arts Council is a statutory body under the aegis of my Department. As such, it is obliged to observe the 2016 code of practice for the governance of State bodies, which requires such bodies to "serve the interests of Government as shareholder, the taxpayer, and all other stakeholders, and pursue value for money in their endeavours". The council's obligations under the code of governance are encapsulated in an annual oversight agreement and an annual programme delivery agreement with the Department. The oversight agreement and the delivery agreement are signed each year by the chair and the director, respectively.

All of the Arts Council's expenditure is subject to value for money concerns. This includes the cost of the premises occupied by the council. It is incumbent on the council to keep expenditure on all outgoings under constant review to ensure best value for taxpayers' money. If the business case for any decision on the Arts Council's accommodation has been properly prepared by the time it reaches the board, it will include at least three options. It would be unrealistic and simplistic to assume that the decision revolves around the annual rent only. A proper business case should cover all the costs arising over an extended period of up to several decades. It would properly incorporate all costs including but not confined to rent, energy, insurance, repairs and maintenance, changes in regulations and service charges. In addition, every State agency should have due regard to sustainability and accessibility.

The Arts Council is a body corporate under section 8 of the Arts Act 2003. It has the power to acquire, hold and dispose of land and property with my consent and that of the Minister for Finance. To date, the council has not applied for such consent. I am confident that the Arts Council will comply with all requirements in appraising available options for its future accommodation needs. If the council does not examine options for alternative accommodation when the opportunity presents itself, it will not meet its obligations under the code of practice for the governance of State bodies.

Like the Minister, I presume the Arts Council and any other statutory agency would comply fully with the guidelines that have been laid out for the renting, leasing and disposing of property. According to the whistleblower in this instance, a business case has not been made. Has a business case been presented to the Minister, or to officials in the Department, with regard to the Arts Council's move? I have been told, subsequent to the protected disclosure being sent to the Minister, that this move is imminent. I understand that the negotiations on the new property are at such a heightened stage that the leases are being drawn up. Given that the new property seems to involve an increase of more than 30% in the annual rent, I suggest that this move is not as appropriate as it has been presented to the board of the Arts Council. Has a business case been made? If not, have the Minister and the Department instructed the Arts Council to prepare such a case before the attempt to move the council's head office goes any further?

I understand that a business case was presented to the Arts Council in September, following a discussion with the Department in August. I think that answers the Deputy's question about the business case. It is important to say that the Arts Council considers itself to be fully compliant with its governance procedures and statutory obligations under sections 8 and 9 of the Arts Act 2003, which relate to property acquisition and disposal. When a decision to enter any new lease or purchase is agreed, the council will proceed to seek the consent of the Minister in accordance with section 8(3) of the 2003 Act before any new lease is signed or any future purchase options are proceeded with. As I said, that consent has not yet been sought. The Department has been aware of this matter for several months. The Arts Council is required to examine its accommodation options to ensure the best value for money is obtained. There are many complex issues to consider when such a decision is being made. This decision will have an impact on the council for decades to come. As I said earlier, it is not sufficient to compare annual rents.

Basically, the Minister is saying that a business case to allow the Arts Council to purchase or lease another building has not come before her or before the Department in the appropriate format. The council will not be fully compliant until a decision is made. The Minister might decide in the future that the business case and the proposal are not fully compliant. I ask her to look at the protected disclosure when she is considering this matter. She should ask the Arts Council to make a full case that deals with the fact that it is in negotiations with the existing landlord on a further extension to the leasehold on No. 69 at the same time as it is negotiating the purchase of a new building. As part of the negotiations with the landlord, consideration is being given to major alterations to the building to make it fully accessible. That would be a much cheaper option for now and into the future. Given the state of the finances, it would be better to spend money on the arts than on buying a building to house the Arts Council.

According to the chair of the Arts Council, Professor Kevin Rafter, the council has been examining the options with regard to its future location for the past six months. This issue was the subject of detailed discussions at five recent meetings of the council. The Department of Culture, Heritage and the Gaeltacht has been informed of these discussions. Arts Council staff were briefed on them last week. The Arts Council has been undertaking significant property searches since 2013. It has viewed several options over the intervening years. This process has identified four property options for the council. First, it can extend the leases on Nos. 69 and 70 and the mews without taking any extra space. As the Deputy will be aware, these properties are the subject of a rent review at present. Second, it can extend the leases on Nos. 69 and 70 while taking the full building in the case of No. 69. Third, it can lease a new building in a city centre location. Fourth, it can purchase a new building in a city centre location. As I have said, the Arts Council is in protracted lease renewal discussions with its current landlord. The timing of this process has coincided with the recent identification of a new property option. Unlike other options that have been explored in the past, this option substantially meets the existing and evolving needs of the Arts Council, particularly with regard to new policy areas that have been identified and prioritised by the council. In June 2019, it was agreed that the Arts Council needs a public-facing, accessible, greener and more modern work environment.